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6 Oct, 2011

Global Trade Unions Seek End To Garbage-In, Garbage-Out Economic Policies

If world leaders really wish to stop the repeated cycle of economic and financial crises and create a new agenda for change, they need to start listening less to the people at the top and more to those at the bottom, according to global trades unions. In a formal statement prepared for presentation to the 2011 APEC Economic Leaders’ Meeting (Honolulu, November 12–13, 2011), the International Trade Union Confederation/ Asia Pacific Labour Network (ITUC/APLN) has issued a strong call for reregulation (as opposed to continued deregulation) of the crisis-ridden and destabilising financial markets and the formation of a APEC labour forum to ensure that workers views are heard.

Posted earlier this week on the website of the ITUC, the statement is a damning indictment of global development policies and their self-serving advocates. It has strong relevance to the travel, tourism and transportation industries, all of which are locked in boom-and-bust cycles that wax and wane in direct relation to the direction of the prevailing economic and geopolitical winds.  Download the full statement here

The ITUC/APLN position paper says it’s time to end this. “APEC Leaders must correct the distortion and redirect APEC so as to achieve the overarching and interrelated objectives of growth that is both equitable and sustainable, and thereby narrow the gaps between and within member economies.” It adds, “APEC needs to play a key role in concrete measures to achieve recovery, to reduce the social impact of the unprecedented triple economic, employment and climate crises and to promote the creation of decent work and green jobs as a response. Therefore APEC Leaders must work together to devise strong, effective and coordinated economic recovery programmes within the framework of a decent work agenda based on the ILO Global Jobs Pact.”

The position paper conveys a stark common-sense, bottom-line message: if long-standing policies that were supposed to have created an era of economic nirvana have failed, global decision-makers need to rethink those policies, and identify alternative perspectives – in other words, seek a second opinion. This means listening to alternative voices, especially trades unions and civil society movements, many of whom have long warned of the consequences of the former policy prescriptions, were rebuffed or ignored but are now being proved right.

In that vein, the paper calls for a re-examination of the role of credit rating agencies in creating the global financial and economic crisis, more transparency in negotiating free trade agreements, more consultations with more attention to workers’ rights and working conditions, especially female workers, and better safety nets to protect workers against crises.

The ITUC/APLN position paper is very much in line with the global awakening now under way, including the “Occupy Wall Street” protests in the United States. It reflects widespread and growing frustration with the fact that those at the top rarely pay the price for their failed policies while those at the bottom get hurt the most, thus further exacerbating the rich-poor income gap. The paper should be read carefully in travel & tourism whose forums and conferences are usually dominated by speakers from banks, multinational corporations and consultancies who, according to the trades unions, should now be considered a part of the problem. For travel & tourism industry groupings such as PATA, which are looking for new change-agendas, the report is a readymade roadmap to help chart a new course in the emerging world order.

Says the statement, “The ITUC/APLN urges APEC Leaders to use the APEC forum to achieve economic recovery, promote decent work, establish effective rules for the global economy and strengthen labour market security, with full involvement of trade unions in APEC economies.” It lists nine immediate points for action as “the best way to a stronger community, a more sustainable future”:

1)     Take effective measures to respond to the global economic and financial crisis and re-regulate the financial system;

2)     Adopt concrete measures in order to promote labour participation in APEC including the establishment of an APEC Labour Forum;

3)     Work for the ongoing Trans-Pacific Partnership negotiations to produce a truly 21st Century trade model – one that promotes the creation of good, green jobs, protects the rights and interests of working people, leads to long-term, balanced economic growth and development and promotes a healthy, sustainable environment – and furthermore promote fundamental workers’ rights in all regional, bilateral or multilateral trade agreements and economic integration processes, including in the planned Free Trade Area of the Asia-Pacific;

4)     Tackle climate change and global warming in an ambitious and comprehensive manner, including through the creation of green jobs and skills;

5)     Strengthen the building of the labour market, develop active labour market policies, improve employment services and enhance workers’ skills, as part of implementing the APEC human resources development (HRD) agenda with full consultation and meaningful participation of social partners, including an APEC policy initiative to integrate the unemployed, young people, women, migrant workers and precarious/informal workers into employment and train the labour force for new skills and technologies;

6)     Put strong emphasis on the creation of decent and productive employment through developing a comprehensive APEC Decent Work Strategy;

7)     Address informal and atypical forms of employment and undertake a comprehensive APEC Action Plan to promote formalisation of economic and labour activities;

8)     Develop APEC guidelines to ensure the proper implementation of non-discriminatory policies in member economies and to avoid the worsening of income inequality;

9)          Put strong emphasis on the establishment of a Social Protection Floor and introduce APEC Social Safety Net Guidelines to assist APEC Economies to reinforce social protection systems.

The paper calls for the most priority to be devoted to tackling the financial and economic crisis. Says the report, It is critical that the world’s major economies maintain their actions to create employment and avert renewed global recession. APEC Leaders must rise to the challenge and work on measures to strengthen demand and create quality employment in line with the ILO Global Jobs Pact. In order to create a sustainable economic model the Leaders need to support downsizing and strongly regulating the financial sector and bring it back to its original role of serving the real economy.”

It adds, “APEC Finance Ministers have stressed that due to the significant volume of net capital flows in emerging economies of the region, the risk of capital flow volatility and asset prices have increased. The Ministers agree that financial reforms are needed. APEC Leaders should support measures that will downsize the financial sector and return it to its legitimate role: serving the real economy. In this context, the role of credit rating agencies in creating the crisis needs to be re-examined and criteria should be set regarding qualification to make ratings. Instead of fiscal austerity policies and increased expenditure cuts APEC economies should introduce new sources of funding such as a Financial Transactions Tax (FTT), and raise more revenue with more progressive tax systems and elimination of tax havens.”


Discourage layoffs and protect minimum wages: As unemployment rates in APEC economies remain high, APEC Leaders must take measures to secure the livelihoods and the employment of workers in times of economic crisis. Flexibilisation of the labour market and the promotion of contractual labour are not solutions; along with the creation of decent, productive employment and green jobs, paramount importance must be given to protecting existing jobs and wage levels, on the basis of the ILO Global Jobs Pact agreed by the International Labour Conference in June 2009.  

Support quality job creation: The ITUC/APLN calls for ambitious decent work plans at national and regional level and underlines the crucial role of decent work in achieving full and sustainable economic recovery. Consequently, fiscal expenditure should be better oriented towards quality job creation and new investments should be made in public works, including large-scale labour intensive investments for the development of “green” infrastructure with a view to creating employment quickly. Further to this, investments need to be made in social and human infrastructure.

Set up a permanent consultative APEC Labour Forum: The ITUC/APLN calls on Leaders to endorse the establishment of an APEC Labour Forum, in the form of an APEC formal consultative mechanism with trade unions comparable with the arrangements for access by the Apec Business Advisory Council and based on the criteria agreed by APEC’s trade union movement  that would follow the practices of the ILO with respect to the most representative trade union centres of APEC Economies. Leaders should agree to instruct their Senior Officials to work in consultation with the ITUC/APLN to establish an APEC Labour Forum.

Include fundamental workers’ rights in the APEC and TPP agendas: Many fundamental Conventions of the ILO remain to be ratified and, even if ratified, to be fully applied in APEC Economies. APEC Leaders should agree to include the promotion of the ratification and application of fundamental workers’ rights in the APEC agenda as part of an expanded agenda on labour and social issues. Moreover, the Leaders of the TPP should agree to refrain from liberalising trade and investment to the detriment of workers. The ITUC/APLN calls on the TPP Leaders to mandate the inclusion of an ambitious labour chapter that will make the TPP a truly model trade agreement for the 21st century and will set the standard for future agreements worldwide.

Support the inclusion of labour and social issues in the WTO: A significant contribution which the Leaders’ Meeting could make to reinforce the long-term sustainability of the WTO would be to support taking employment issues into account in future trade negotiations, and thus strengthen the analysis of the impact of trade on employment and sustainable development within the WTO. Assessments of the Doha Round of WTO negotiations show that the presumed benefits of trade liberalisation increasingly appear vague and that multilateral trade negotiations are being abandoned because they cause more job destruction than job creation.

APEC Leaders should recognise the need for the WTO to begin a dialogue in this area. They should recommend that the WTO set up a committee on trade and employment that could seek to analyse and anticipate the impact of trade liberalisation on the level and quality of employment, and make recommendations to the WTO General Council accordingly.

Ensure that RTA/FTA negotiations are transparent and reflect the views of civil society, including trade unions: For too long, civil society organisations, including trade unions, have been excluded from any meaningful participation in trade agreement negotiations. Despite our best efforts to date, the negotiating texts remain secret, engagement is all too infrequent, and the views of civil society, from what we can ascertain, have not been duly considered and incorporated in the negotiations. As with the Free Trade Area of the Americas (FTAA) negotiations, draft texts should be made available for public review and comment. Governments must conduct regular and meaningful consultations with their respective civil societies throughout the negotiations.

Build equal judicial access for business, unions and other legal entities: The ITUC/APLN urges the APEC Leaders to ensure that any measures to render the existing FTAs more business-friendly must not further worsen the conditions or wages of employees and must ensure that provisions on the protection of labour rights are incorporated. Bilateral investment treaties (BITs) need to incorporate clauses that require governments not to lower labour standards in order to attract foreign investors. Access to any dispute mechanism should be provided to all, including trade unions and environmental groups, and their scope should be extended to the application of social and environmental provisions.

Developing 21st century skills and competences in APEC: APEC’s HRDWG has been active in developing the “21st Century Skills and Competences For All”, an effort to define necessary qualities of the future worker and integrate them into education in order to start preparing the labour force for future challenges. Understanding the pressing problem of youth unemployment, the Lead Shepherd of the 33rd HRDWG suggested the linkage of jobs and education as a tentative theme of the next APEC Education Ministerial Meeting. The ITUC/APLN welcomes APEC’s work on enhancing human capital and calls for further resources to be invested in this effort, with full participation of the social partners.

A new dimension in APEC members’ economic integration: APEC has adopted a primarily market-led agenda and gives lower priority to social goals such as achieving full and productive employment and environmental and social sustainability. This imbalance must be redressed. APEC has been evolving from an organisation solely concerned with commerce into one which seeks to create regional consensus on issues varying from the political and security domain to education, social security and public health.

APEC members must incorporate an adequate social dimension into their economic integration. APEC Leaders must agree to address the linkages between growth, investment, and decent employment creation, with the involvement of the International Labour Organisation (ILO) and social partners in the region. Moreover, the Leaders, Ministers and APEC bodies should involve trade unions and civil society in creating a strong social and environmental dimension in APEC’s work and make use of the expertise and ideas residing in such organisations.

Furthermore, the ITUC/APLN is concerned at the growing interlinkages between APEC and the “Doing Business” secretariat of the World Bank, as considered at APEC’s Economic Committee. We insist that the “Employing Workers Indicator” (EWI) of the Doing Business report, now disavowed even by the World Bank itself, must not be used in any investment study conducted by APEC.

Invest urgently in training schemes and employment services to prevent long-term unemployment: After the onset of the financial and economic crises it is particularly urgent to take active measures to integrate unemployed people into the job market, with special attention given to preventing unemployment from becoming long-term. A particularly important effort is required to enable women and young people to overcome the specific obstacles they face in the labour market.  

An ambitious APEC Decent Work Strategy: In this regard, APEC must start an initiative for effective policies to promote decent work in EPZs and elsewhere. The Leaders should adopt a Strategy for the creation of decent jobs and the transformation of millions of precarious and informal jobs into decent employment. Among other elements, the Strategy should develop a framework for responsible foreign direct investment (FDI) that promotes decent work and ensures that enterprises contribute to economic and social progress through investment and technological upgrading. Special provisions should be put in place to address issues of labour standards’ violations, with a focus on rights and working conditions of female workers.

Informality and precarious forms of employment are the causes of poverty: There are hundreds of millions working in precarious and informal conditions all over the Asia-Pacific region, particularly in developing economies. Precarious/informal employment is characterised by unstable labour relations, unsafe and unhealthy working conditions, long working hours, low levels of skills and productivity and low wage and social security levels. Most of the workers are trapped into poverty because they lack access to rights, finance, markets and technology.

Precarious and informal workers also lack access to publicly provided health care and social protection and, hence, they are vulnerable to even small economic or health shocks. In the many cases where such unprotected workers do not have access to education for their children, poverty is reproduced in subsequent generations. Women, and increasingly young people, are the most frequent victims of informality and any action to address the problem needs to have a strong gender and youth dimension.

A comprehensive APEC Action Plan focusing on women: APEC Leaders should mandate a comprehensive Action Plan to be carried out in cooperation with the ILO and social partners to achieve the formalisation of employment. The key to reducing informality is to extend the protection of the law to all workers – as well as, in many cases, to their employers who generally lack legal recognition as well. Technical assistance and capacity building projects are important with emphasis on the promotion of decent work for women.

Economies with lower levels of informality should share their expertise and assist economies with graver problems, including simplification of legal and administrative systems. The Plan should encourage the organising of workers and self-employed persons in disguised employment relationships, with changes in the legal framework so as to enable more workers to join trade unions and to participate in genuine collective bargaining. The mandate should also address issues of financial inclusion. Attention should also be paid to the issue of universal access to financial services. Precarious/informal workers, women and the self-employed should be assisted to have access to sound and high-quality financial services with their dignity fully respected.

An APEC framework for a rights-based approach to labour migration: Migration represents both challenges and opportunities in the Asia-Pacific. While migration can benefit workers in both sending and receiving economies, far too often it is a last resort for people who are unable to find work at home and therefore are left open to exploitation in foreign lands, in sectors ranging from construction to domestic work. Frequently, migrants work in the informal economy and are discriminated against, and may even be victims of forced labour. APEC Leaders must agree to develop a framework for migration which takes account of national labour market needs, with reference to the Conclusions on a Fair Deal for Migrant Workers that were adopted at the 92nd International Labour Conference in 2004 and the ILO Multilateral Framework on Labour Migration adopted in 2005, with full application of national labour laws and working conditions without discrimination.

Such a framework should be drawn from available information on policy and best practices in economies in international migration, existing proposals to enhance the economic benefits of migration and relevant international standards, including the UN International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families and ILO Conventions Nos. 97 and 143. The ITUC/APLN considers that APEC Leaders should pay attention to the poor ratification rate of these international standards in APEC economies. APEC member economies should work out a timetable for their ratification and should further promote balanced industrial development and decent work so that any migration is undertaken voluntarily and not as an obligation to escape misery or repression.

Growing global understanding of the necessity of a social protection floor: The 5th APEC Human Resources Development (HRD) Ministerial Meeting (Beijing, China, 16-17 September 2010) recognised the important role that social safety nets played in the crisis, especially for vulnerable groups. Social protections systems are seen as “economic automatic stabilizers, by contributing to aggregate demand, elevating social inclusion and enabling people to take advantage of market opportunities and share in the benefits of economic growth”while they also promote labour mobility and job creation. The social protection floor (SPF) should be the core of national development strategies. Countries should gradually address the differentiated levels of social benefits in a coherent, consistent and efficient way so as to optimise limited resources and reduce the poverty and insecurity of vulnerable groups. There is increasing global understanding12 that the establishment of a universal social protection floor and the improvement of existing social protection systems would deliver a great deal in achieving more balanced growth.